The main European stock markets are expected to decline on Monday, with investors preparing for numerous publication of indicators and interventions from monetary policy makers this week.
Futures contracts suggest an opening down 0.18% for the Parisian CAC 40, compared to 0.17% for the FTSE in London, 0.13% for the Dax in Frankfurt, and 0.18% for the EuroStoxx 50.
No indicator is expected on Monday, but the week will be busy with the publication of inflation in the euro zone and the United States.
PCE inflation, the Federal Reserve’s preferred gauge of price dynamics, is due Thursday. The ISM Manufacturing Activity Indicator and Michigan Sentiment Indicator will be released Friday.
Inflation in the euro zone will be published on Friday, with the final manufacturing PMI indicators.
“For the euro zone, the big question will be whether the inflation figures will reassure the European Central Bank (ECB) about the possibility of reducing its rates later in the year,” summarize ING strategists.
“Doubts about the pace of disinflation have become more salient in recent weeks, and we should not expect a significant fall in inflation in February, apart from some base effects.”
The week will be rich in interventions from those responsible for monetary policy: Christine Lagarde, President of the ECB, will speak this Monday at 4:00 p.m. GMT in Strasbourg, on the occasion of the presentation of the ECB’s annual report, while at least ten members of the Fed’s board of governors will speak this week, starting on Tuesday.
In the euro zone as in the United States, monetary policy makers should reiterate that excessively high inflation justifies lastingly restrictive rates, and that the first cuts could begin later than the markets anticipate.
VALUES TO FOLLOW:
A WALL STREET
The S&P 500 and Dow Jones indices ended at records Friday on the New York Stock Exchange, which continued to benefit from stocks linked to artificial intelligence after Nvidia’s results.
The Dow Jones index gained 0.16%, or 62.42 points, to 39,131.53 points. The broader Standard & Poor’s 500 gained 1.77 points, or 0.03% to 5,088.80 points. The Nasdaq Composite fell 44.80 points (-0.28%) to 15,996.823.
Nvidia (+0.36%) continued to attract the attention of the markets despite fears linked to interest rates from the Federal Reserve.
IN ASIA
The Tokyo Stock Exchange ended at a record level on Monday, supported by the performance of the pharmaceutical sector. The Nikkei index gained 0.35% to 39,233.71 points and the broader Topix gained 0.48% to 2,673.46 points.
Chugai Pharmaceutical gained 6.37%, among one of the biggest gains in the index, while the pharmaceutical sector gained 2.5%.
Chinese markets closed lower after nine consecutive sessions of gains. The Shanghai SSE Composite lost 0.93%, the CSI 300 1.04%. The Hong Kong Hang Seng index fell 0.59%.
RATE
US yields are in slight decline, before major debt issuances on Monday: $63 billion of two-year securities and $64 billion of five-year securities will be issued during the day, two record amounts, as well as $42 billion of titles at seven years.
The ten-year Treasury yield fell 4.3 bps to 4.2167%, while the two-year rate fell 1.9 bps to 4.6708%.
The German ten-year yield erodes by 2.2 bp to 2.341%, while that of the two-year rate is stable at 2.8688%.
CHANGES
Currencies vary little ahead of a week full of indicators.
The dollar is stable against a basket of reference currencies, while the euro gains 0.10% to 1.0829 dollars, and the pound sterling loses 0.11% to 1.2665 dollars.
In Asia, the yen strengthened by 0.09% to 150.36 yen per dollar, while the Australian dollar fell by 0.08% to 0.6555 dollars.
OIL
Crude is falling, with markets remaining worried about the outlook for rates in the United States, which could remain high for longer than expected.
Brent lost 0.2% to $81.46 per barrel, with light American crude (West Texas Intermediate, WTI) losing 0.31% to $76.25.
NO ECONOMIC INDICATOR ON TODAY’S AGENDA
(Written by Corentin Chappron)